OPINION AND ORDER
Before the Court is the Report and Recommendation (“R & R”) (Docket No. 27), regarding defendant’s motion for judgment on the pleadings under Federal Rule of Civil Procedure 12(c) (Rule 12(c)) (Docket No. 22), which plaintiffs did not oppose. Having considered the magistrate judge’s recommendations, and the parties’ objections and responses, the Court ADOPTS the R & R.
DISCUSSION
I. Procedural History
On April 19, 2011, Jardín de las Catalinas Limited Partnership (“Catalinas”) and Jardín de Santa Maria Limited Partnership (“Santa Maria”) (together, “plaintiffs”) filed a complaint against George Joyner, in his official capacity as executive director of the Puerto Rico Housing Finance Authority (“PRHFA”) (hereafter “defendant”), alleging a seizure of proper
After their prolonged absence, plaintiffs swiftly entered the scene and filed a motion asking the magistrate judge to reconsider the R & R. (Docket No. 28.) The magistrate judge denied plaintiffs’ motion, and noted that “[t]he content of the reconsideration may be filed by plaintiffs as an objection to the Report and Recommendation.” (Docket No. 29.) Plaintiffs filed their objections to the R & R, defendant filed an opposition to plaintiffs’ objections, plaintiffs filed a reply, and defendant filed its surreply. (Docket Nos. 30, 33, 38, 43.) The Court now considers the applicable legal standards and the parties’ arguments.
II. Legal Standards
A. Standard under 28 U.S.C. § 636(b)(1)
A district court may refer, inter alia, “a motion ... for judgment on the pleadings” to a magistrate judge for a report and recommendation. See 28 U.S.C. § 636(b)(l)(A)-(B); Fed.R.Civ.P. 72(b); Loc. Rule 72(a). Any party adversely affected by the report and recommendation may file written objections within fourteen days of being served with the magistrate judge’s report. See 28 U.S.C. § 636(b)(1). A party that files a timely objection is entitled to a de novo determination of “those portions of the report or specified proposed findings or recommendations to which specific objection is made.” Sylva v. Culebra Dive Shop,
B. Federal Rule of Civil Procedure 12(c) Standard
“A motion for judgment on the pleadings is treated much like a Rule 12(b)(6) motion to dismiss.” Perez-Acevedo v. Rivero-Cubano,
When faced with a motion for judgment on the pleadings, “[a] plaintiff is not entitled to ‘proceed perforce’ by virtue of allegations that merely parrot the elements of the cause of action.” Id. at 12 (quoting Ashcroft v. Iqbal,
C. Plaintiffs’ Waiver of any Objection to the Report and Recommendation
Plaintiffs failed to oppose defendant’s motion for judgment on the pleadings. They moved for an extension of time to respond to defendant’s motion, were granted the extension, and still failed to file a timely opposition to defendant’s motion. (See Docket Nos. 25 & 26.) They presented their arguments on the merits of that motion in their objection to the report and recommendation. (See Docket No. 30.) After the magistrate judge granted defendant’s motion for judgment on the pleadings, plaintiffs filed a motion for reconsideration of the R & R. (Docket No. 28.) The magistrate judge appropriately denied the plaintiffs’ motion to reconsider, but noted that plaintiffs could make their arguments in an objection to the R & R. (Docket No. 29.)
First, as a general matter, defendant correctly points out that plaintiffs’ failure to raise the relevant claims in a timely manner results in a waiver of those objections. See DiMarco-Zappa v. Cabanillas,
Even had the motion never been referred to a magistrate judge, it is clear that “[a] party’s failure ... to timely oppose a motion in the district court constitutes forfeiture.” Crispin-Taveras v. Municipality of Carolina,
Although 28 U.S.C. § 636(b)(1)(C) gives parties the right to de novo review to specific parts of reports and recommendations to which they properly object, those parties are “not entitled to a de novo review of an argument never raised.” See Borden v. Sec’y of Health and Human Servs.,
III. The Court’s Review of the R & R
The magistrate judge granted defendant’s motion for judgment on the pleadings on the basis that plaintiffs failed to state a cause of action under section 1983, and on the basis that their claims are time-barred by the applicable statute of limitations. (Docket No. 27.) While the Court need not consider plaintiffs’ untimely motions, for the purposes of thoroughness, the Court has reviewed the applicable motions and is in agreement with the magistrate judge’s analysis.
First, plaintiffs have not established an entitlement to a property interest in the tax credit created under section 42 of the Internal Revenue Code. Plaintiffs seem to acknowledge that the allocation of low income housing tax credits rests on the sole discretion of the state allocating agency, but argue that the increase in the LIHTC granted by HERA were not subject to discretion, but were mandated by federal statute. (Docket No. 30 at 3-4.) Plaintiffs have failed to cite to any relevant case law that contradicts First Circuit Court of Appeals precedent, which states that because the state agency has “absolute discretion to determine whether federal income tax credits are awarded to an applicant”, an applicant has no “cognizable ‘property interest’ in the ‘promised’ federal income tax credits.” Barrington Cove Ltd. Partnership v. Rhode Island Housing and Mortg. Finance Corp.,
Plaintiffs reliance on Rio Grande Community Health Center, Inc. v. Rullan is misplaced.
Thus, plaintiffs have no entitlement to tax credits under the LIHTC or under the HERA, which temporarily created a fixed floor rate of 9 percent for low income housing tax credits. The enactment of HERA does not explicitly affect the discretion of state agencies to grant or deny tax credits for low-income housing. In the absence of a statutory amendment or precedential case law, the Court finds that the First Circuit Court of Appeals, decision in Barrington Cove remains good law, and that plaintiffs have not shown an entitlement to a property interest in the allocation of tax credits under section 42 of the IRC.
Second, plaintiffs’ claims are time-barred because plaintiffs filed a complaint after the statute of limitations on their section 1983 claim had run. As the R & R
As defendant correctly points out, a continuous tort under Puerto Rico law “is ‘ongoing unlawful conduct,’ not a continuing harmful effect.” (Docket No. 33 at 10, citing M.R. (Vega Alta), Inc. v. Caribe General Elec. Products, Inc.,
The date of receipt of the Form 8609 documents also goes against plaintiffs’ claims of inadequate notice. The 8609 documents most clearly state the amount of credit to be allocated, and plaintiffs cannot seriously allege that they were “tricked” by defendant because they failed to do their own due diligence in reviewing the forms upon receipt.
Finally, the Court finds that the Baldwin factors are inapplicable and that plaintiffs are not excused from the statute of limitations. See Baldwin County Welcome Center v. Brown,
IV. Conclusion
The Court has made an independent examination of the record in this case and ADOPTS the magistrate judge’s findings and recommendations. Plaintiffs have failed to state a cause of action under section 1983 because they have no legitimate property interest in tax credits granted pursuant to Section 42 of the IRC. Moreover, plaintiffs’ claims are barred by the statute of limitations. Defendant’s motion for judgment on the pleadings is GRANTED and plaintiffs’ case is DISMISSED WITH PREJUDICE. Judgment shall be entered accordingly.
IT IS SO ORDERED.
INTRODUCTION
Plaintiffs Jardín de las Catalinas Limited Partnership and Jardín de Santa María Limited Partnership (hereafter “plaintiff Catalinas” and/or “plaintiff Santa María”) are limited partnerships organized under the laws of Delaware and authorized to do business in the Commonwealth of Puerto Rico. Catalinas is the owner of low income building consisting of 132 rental apartments in a qualified low income building under the Internal Revenue Code. Santa Maria is a limited partnership also organized under the laws of Delaware and the owner of a low income building consisting of 77 rental apartments qualified as low income building. Defendant is the Executive Director of the Puerto Rico Housing Finance Authority (hereafter “PRHFA” or “defendant”), a subsidiary of the Puerto Rico Government Development Bank, an instrumentality of the Commonwealth of Puerto Rico. PRHFA is the designated state allocation agency which administers and is responsible for the allocation of the Low Income Housing Tax Credits.
Plaintiffs Catalinas and Santa Maria filed above complaint against defendant for a claim arising under the Internal Revenue Code, for civil rights violation upon an alleged seizure as to property constituted by tax credit on federal income tax returns which was offset dollar for dollar from an indirect federal subsidy used to finance low-income housing. (Docket No. 1).
Plaintiffs submit that, upon enactment of the Housing and Economic Recovery Act of 2008, among other provisions, there was a temporary increase in the applicable credit percentage for buildings, such as theirs, that were placed in service after July 10, 2008. Despite said mandate, defendant seized the additional credits received from the U.S. Department of the Treasury instead of distributing those credits among the low income housing projects. Plaintiffs filed the complaint against defendant PRHFA for arbitrarily reducing the qualified basis for each project and, thus, seizing the additional credits received under federal law, which it entails a civil right claims for the taking of property under 42 U.S.C. Section 1983.
On December 19, 2011, defendant PRHFA filed a Motion for Judgment on the Pleadings. (Docket No. 22). Plaintiffs requested an extension of time to file their reply to the pending Motion for Judgment of the Pleading, which was granted until January 20, 2012. (Docket Nos. 25 and 26). The record shows that no reply has been filed.
The Court had previously referred the present case to this Magistrate Judge for case management and all further proceedings except the pretrial, and trial. As such, it is proper to issue a report and recommendation as to any pending dispositive motion. (Docket Nos. 10 and 11).
STANDARD OF REVIEW FOR JUDGMENT ON THE PLEADINGS
The standard of review of a motion for judgment on the pleadings under Federal Rule of Civil Procedure 12(c) is the same as that for a motion to dismiss under Rule 12(b)(6). Pasdon v. City of Peabody,
Under Rule 12(b)(6) of the Federal Rules of Civil Procedure dismissal may be warranted for failure to state a claim upon which relief can be granted. To elucidate a motion to dismiss the Court must accept as true “all well-pleaded factual averments and indulg[e] all reasonable inferences in the plaintiffs favor.” Aulson v. Blanchard,
The Supreme Court most recent opinion changes the standard for a motion to dismiss so that plaintiff will now have to include more information in the pleadings if he/she wants to survive a 12(b)(6) motion. See Bell Atl. Corp. v. Twombly,
The First Circuit has cited to this decision and noted this new standard in Rodríguez-Ortiz v. Margo Caribe, Inc.,
At the outset, we note that even under the liberal pleading standard of Federal Rule of Civil Procedure 8, the Supreme Court has recently held that to survive a motion to dismiss, a complaint must allege “a plausible entitlement to relief.” Bell Atl. Corp. v. Twombly,550 U.S. 544 ,127 S.Ct. 1955 , 1967,167 L.Ed.2d 929 (2007). In so doing, the Court disavowed the oft-quoted language of Conley v. Gibson,355 U.S. 41 , 45-46,78 S.Ct. 99 ,2 L.Ed.2d 80 (1957), that “a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” See Twombly,127 S.Ct. at 1969 . The Court found that the “no set of facts” language, if taken literally, would impermissibly allow for the pleading of “a wholly conclusory statement of [a] claim,” and that “after puzzling the profession [* *8] for 50[*96] years, this famous observation has earned its retirement.” Id. at 1968, 1969.
Similarly under Fed.R.Civ.P. 12(b)(6) for failure to state a claim, the factual statements of the complaint are still considered true, indulging every reasonable inference helpful to plaintiffs’ cause. However, the tenet that a court must accept as true all the allegations contained in a complaint is inapplicable to legal conclusions and mere recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice. Ashcroft v. Iqbal,
LEGAL DISCUSSION
Defendant PRHFA’s Motion for Judgment on the Pleadings rests in that it has already been clearly established plaintiffs do not have entitlement to these credits and as such lack a property interest in the same, for which their Section 1983 claim should not be allowed. Upon plaintiffs Las Catalinas and Santa Maria having been unable to establish a violation of a constitutional right, it is further averred the defendant Executive Director of PRHFA would be entitled to qualified immunity as to plaintiffs’ claims.
I. Cause of Action under Section 1983.
To establish defendant’s liability under Section 1983 plaintiffs must comply within its provisions that state:
Every person who, under color of any statute, ordinance, regulation custom, or usage ... subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress.... Title 42, United States Code, Section 1983.
Defendant PRHFA claims plaintiffs have not established a cause of action under Section 1983, for they must be able to sustain having been deprived of rights, privileges or immunities secured by the Constitution or laws of the United States. As such, there must have been an actual deprivation of plaintiffs’ federally protected rights; and there must have been a causal connection between the defendant’s conduct and the deprivation of the constitutional rights claimed.
Plaintiffs Catalinas and Santa Maria claim being deprived of monies illegally by defendant’s not granting or miscalculating their tax credit under Section 42 of the Internal Revenue Code for their low income qualified properties, that is, being deprived of their property. However, in United States v. Griffin,
Furthermore, in examining the statute regarding federal low income housing tax credit program in Mendoza v. Frenchman Hill Apartments LP
Defendant PRHFA also submits the tax credit created by Section 42 of the Internal Revenue Code is awarded based on criteria to be set by each state agency in a qualified allocation plan which does not identify any particular condition under
Herein plaintiffs’ action is similar to Barrington Cove, LP v. R.I. Hous. & Mortg. Fin. Corp.
As such, it can be concluded that plaintiffs Catalinas and Santa Maria lack a cause of action under Section 1983 and judgment on the pleadings for defendant is warranted.
II. Statute of Limitations.
In the alternative that a cause of action may still be found under Section 1983 as to plaintiffs’ claim for the alleged seizure of a percentage of the tax credits, defendant PRHFA submits their claim is time-barred.
These credits are allocated by the state housing agency, herein defendant PRHFA, through the use of IRS Form 8609 (Low Income Housing Credit Allocation and Certification). Plaintiffs Catalinas and Santa Maria received and signed the relevant IRS Forms 8609 on or before April 15, 2010, for which the herein Complaint presented on April 19, 2011, was filed more than one year thereafter. As such, defendant submits that plaintiffs’ Section 1983 claim is late.
Federal civil rights statutes such as the one under Section 1983 borrow the state’s limitation period governing personal injury action, which in the Commonwealth of Puerto Rico is one year. One year governs all personal injury actions and/or tort claims as set forth in the Puerto Rico Civil Code. P.R. Laws Ann. Tit. 31, § 5298(2). See Torres v. Superintendent of Police,
There is no argument from plaintiffs showing any reason to toll the statute of limitations, for which the filing of the Complaint on April 19, 2011 is considered to be late and the Section 1983 claim time-barred.
CONCLUSION
In view of the above discussed, it is recommended that defendant’s unopposed Motion for Judgment on the Pleadings (Docket No. 22) be GRANTED.
IT IS SO RECOMMENDED.
The parties have fourteen (14) days to file any objections to this report and recommendation. Failure to file same within the specified time waives the right to appeal this order. Henley Drilling Co. v. McGee,
Notes
. No heightened fact pleading of specifics is required but only enough facts to state a claim to relief that is plausible on its face. Bell Atlantic,
. However, defendant George Joyner, Executive Director of PRHFA, was only sued in his official capacity for which qualified immunity would not be applicable since qualified immunity confers immunity only from individual capacity suits, such as suits for money damages, that have been brought against government actors. Nereida-González v. Tirado-Delgado,
. The causal connection requires to establish the defendant’s own action deprived plaintiff of a protected right and said deprivation was intentional.
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. Section 1983 claims accrue when the plaintiff “knows or has reason to know of the injury which is the basis of the action.” Street v. Vose,
. In Section 1983 cases, Puerto Rico law governs the limitation period, including the close related questions of application, for then when a federal court borrows the state statute of limitation, so too the date on which the limitation period starts to run should be determined by slate law defining the application of the limitation period.
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